- Rajoy’s Deepening Budget Black Hole Outpaces Spain’s Cuts (Bloomberg)
- ECB May Need to Cut Rates Given Deflation Risk, IMF Says (Bloomberg)
- Global Recession Risk Rises (WSJ)
- Romney Leads Obama in Pew Likely Voter Poll After Debate (Bloomberg)
- IMF Sees Global Risk in China-Japan Spat (WSJ)
- Republicans shift tone on taxing the rich (FT)
- Romney casts Obama's foreign policy as weak, dangerous (Reuters)
- Europe Salutes Greek Budget-Cutting Will, Raising Aid Prospects (Bloomberg)
- U.S. Downgrade Seen as Upgrade as U.S. Debt Dissolved (Bloomberg)
- IMF Says Most Advanced Nations Making Progress Reducing Deficits (Bloomberg)
- Eurozone launches €500bn rescue fund (FT)
- Italy rejects need for EU control (FT)
- ‘Worst US quarterly earnings since 2009’ (FT)
- Chinese firm helps Iran spy on citizens (Reuters)
- World Bank cuts East Asia GDP outlook, flags China risks (Reuters)
- Foxconn factory rolls on in spite of strike (China Daily)
- Economic recovery ‘on the ropes’ (FT)
- Japan Tries Cars That Make the Mini Look Maxi (Businessweek)
- Euro Finance Chiefs to Give Positive Greece Statement, Rehn Says (Bloomberg)
- Romney attacks drones policy (FT)
- Euro zone mulls 20 billion euro separate budget (Reuters)
- Hong Kong’s Leung Seeks Turnaround With Economy Focus (Bloomberg)
- RBA Keeps Some Documents Private in Securency Bribe Probe (Bloomberg)
- India Inflation to Remain at 7.5%-8% Till Early 2013 (WSJ)
- Romney dominates presidential debate (FT)
- What Romney’s Debate Victory Means (Bloomberg)
- Obama Lead Shrinks in Two Battlegrounds (WSJ)
- "Everything will fall apart unless the Spanish conditions are extremely tough" German policy-maker (Telegraph)
- Draghi Stares at Spain as Brinkmanship Keeps ECB Waiting (Bloomberg)
- RBS facing loss after Spanish property firm collapse (Telegraph)
- Burdened by Old Mortgages, Banks Are Slow to Lend Now (WSJ)
- The Woman Who Took the Fall for JPMorgan Chase (NYT)
- European Banks Told to Hold On to $258 Billion of Fresh Capital (Bloomberg)
- Europe Weighs More Sanctions as Iran’s Currency Plummets (Bloomberg)
In a post entitled 'Mugabenomics: Inflation in UK Higher than in Zimbabwe,' Guido Fawkes points out how the Liberal Democrats Vince Cable once warned that Quantitative Easing (QE) was “Mugabenomics.” This was prior to coming to power and a swift u-turn which would make even the most slippery politician proud. Remember when Vince Cable warned that Quantitative Easing (QE) was “Mugabenomics”? Vince flip-flopped on that even before he joined the coalition. Guido Fawkes then reminds its readers about the time when George Osborne said “Printing money is the last resort of desperate governments when all other policies have failed.” Alas as the blog rightly warns, "In government Osborne has overseen the printing of more money than any other Chancellor in British history. A quarter of the national debt – all this government’s overspending – has been bought by the Bank of England via QE." “So it is not a shock that inflation in Zimbabwe (3.63%) is now lower than inflation in the UK (3.66%, August 2011-July 2012).” Those who have been warning about this monetary madness for some years are gradually being proved right
- No Joy on Wall Street as Biggest Banks Earn $63 Billion (Bloomberg)
- And more good news: IMF’s Blanchard Says Crisis Will Last a Decade (Reuters)
- Hobbit Returns to Find Middle Earth Has Become Expensive (Bloomberg)
- Freddie's Foreclosure Plan Hits Roadblock (WSJ)
- Who will buy the FT? Pearson CEO Scardino Will Step Down as Fallon Takes Over (BBG)
- Jeremy Lin Said to Be in Talks With Harvard on Licensing Deal (Bloomberg)
- Jon Weil tears apart the NYAG "prosecution" - Eric Schneiderman Will Have to Do Better Than This (BBG)
- Portugal Offers to Exchange Bonds as It Seeks Debt Market Access (Bloomberg)
- Is unlimited growth a thing of the past? (FT-Martin Wolf)
- European Bank Capital Results Overtaken by Tougher Global Rules (Bloomberg)
- China’s Slowdown Reverberates as ADB Cuts Forecasts (Bloomberg)
- Tokyo has no plan to extend currency swap deal with Seoul (Reuters)
Technical indicators such as MACD, RSI and STO show that silver is slightly overbought short term.
However, silver can remain overbought in the short term as was seen in silver’s rally in 2011 when silver nearly doubled by surging from below $27/oz to nearly $50/oz in just 3 months - from January 27th 2011 to April 28th 2011.
Economic Surprise Indices have begun to drift back lower in recent days after a short-lived scurry into positive territory as anticipation of Fed/ECB action supported equity valuations over the last few months in the face of deteriorating earnings. Critically though, as Deutsche's Jim Reid notes, headline PMIs (and the ISM) are still well behind levels that are consistent with current equity markets as the disconnect between rich equity prices and poor fundamentals remains very wide. Back around May/June they were broadly in line and since then liquidity has propelled markets but with the data at similar levels, and clearly the hope is that the current fundamental weakness corrects into year-end but at current levels the S&P faces a 9% correction, Europe 22%, and China 25% - hope is indeed a powerful thing.
- RBA Cuts Rate to 3.25% as Mining-Driven Growth Wanes (Reuters)
- Republicans Not Buying Bernanke’s QE3 Defense (WSJ)
- Spain ready for bailout, Germany signals "wait" (Reuters)
- EU says prop trading and investment banking should be separated from deposit taking (Reuters)
- Call for bank bonuses to be paid in debt (FT)
- Spanish Banks Need More Capital Than Tests Find, Moody’s Says (Bloomberg) ... as we explained on Friday
- "Fiscal cliff" to hit 90% of US families (FT)
- The casualties of Chesapeake's "land grab" across America (Reuters)
- U.K. Government Needs to Do More to Boost Weak Economy, BCC Says (Bloomberg)
- World Bank Sees Long Crisis Effect (WSJ)
- UBS Co-Worker Says He Used Adoboli’s Umbrella Account (Bloomberg)
- And more easing: South Korea central bank switches tack to encourage growth (Reuters)
Leading up to the American Financial Crisis. We all had the data, we all saw the sub-prime mess, we all saw the leverage, we all saw the money handed out for nothing and the non-disclosure documents, we all saw the lack of credible ratings supplied by the ratings agencies and yet we went on like it would all continue forever. We ignored it all. We turned our backs but then; we got scalped and so the prime questions must be asked: Are we wise men or are we fools? Did we learning anything from the last go round? Should we act now before we are scalped again considering we only have one head? Since the American Financial Crisis the world has lived off the largesse of the major central banks. It has been a slippery slope and each capital injection or “save the world” speech has been met by risk-on and higher markets as liquidity floods the system. It is a judgment call on our part but we think we are about done with the effectiveness of moves by the central banks.
The following is a comprehensive list of key events to watch over the next several weeks – events that could have very significant bearing on how the euro sovereign debt crisis evolves.
New York's Ultraluxury Office Vacancy Rate Jumps To Two Year High As Financial Firms Brace For ImpactSubmitted by Tyler Durden on 09/29/2012 13:14 -0400
Traditionally, when it comes to reading behind the manipulated media's tea leaf rhetoric and timing major inflection points in the economy, the most accurate predictor are financial firms, whose sense of true economic upside (or downside) while never infallible, is still better than most. Yet unlike employment, which is usually a lagging, or at best concurrent indicator, one aspect that has always been a tried and true leading indicator, has been real estate demand, in this case rental contracts. Due to the long-term lock up nature of commercial real estate contracts, firms are far less eager to engage in rental transactions (and bidding wars) when they expect a worsening macroeconomic environment. Which is why news that office vacancy in Manhattan's Plaza district, the area between Sixth Avenue and the East River from 47th to 65th streets, anchored by the landmark Plaza Hotel at Fifth Avenue and Central Park South which is home to some of the nation’s most expensive and prestigious office towers, and where America's largest hedge funds and PE firms have their headquarters, has just risen to 12.3%, or a two year high, is probably the most troubling news for the economy and a real indicator of what to expect of the immediate future.
It appears banker popularity is low to quite low not only in the US but virtually everywhere. According to Lepizig-Fernsehen, a toxin alert has been issued at a Deutsche Bank branch in Schkeuditz, a suburb town of Leipzig, where 40 people have been "injured" after inhaling a white powdery substance delivered hours before, and which spread via the building's air conditioning system.
It appears that JPM and HSBC's monopoly in the warehousing of tungsten gold is coming to an end. Just two weeks after QEternity was announced, it has become obvious that the only things, literally, that will matter in the future are the ABCDs: Anything Bernanke Can't Destroy. And as a result of a surge in physical purchases, buyers need to store their metal somewhere. Sure enough, one of the the UK's most insolvent banks - Barclays - is more than happy to provide its brand spanking new warehousing services, with the opening of what will be on of Europe's largest PM vaults. From Dow Jones: "Barclays has opened its first precious metals vault in London in a bid to satisfy growing client demand for bullion as a store of value, the bank said Thursday. The vault, which houses gold, silver, platinum, palladium and rhodium and began operating earlier this month, is one of the largest in Europe. While the bank already has extensive trading and clearing capabilities, this is the first time that Barclays has been able to offer its own precious metals storage facility to its customers, having previously relied on third-party storage." Of course, if and when the scramble comes and everyone demands their gold from the vault located in an unknown location, but somewhere in the inner loop of London's M25, Barclays will just say "Ooops." But we will cross that bridge when we get to it.
With the ESM passing through the German high court, and the ECB formally announcing their OMT bond-buying programme, the next headache for European asset classes to digest comes from the will-they-won’t-they speculation regarding a Spanish sovereign bailout. With Spain’s withering finances, elevated borrowing costs and rapidly shrinking tax revenues, the need for governmental assistance is known by all. As such, this report has been compiled to run through each possible bailout scenario and the possible impact across the asset classes.
While much attention has been paid to what Draghi has 'talked' about doing, what Bernanke 'is' doing, what EU Leaders 'are not' doing, and what US politicians 'will not' do - the world's risk markets remain on edge. Admittedly, for now, that edge seems biased to the 'we-believe' side of the fence. However, as Deutsche Bank notes, in their wonderfully succinct chart comparing the impact and probability of potential upside and downside risks to global markets, it is economic (or real!) data that should worry investors the most - though we still fear the Kubler-Ross 'denial' stage that in which Spain/Italy/Portugal/Greece remain mired.